Top Searches:

Premium up, upfront cost of car cover has doubled from September

Following two court orders, the cost of motor cover has doubled from last month. Where on hand for a 150cc bike costing Rs 75,000, the insurance premium would be Rs 7,600. In the case of cars, the owner must pay the premium for three years of third-party insurance and an additional Rs 750 towards a personal accident cover.

TNN | Updated: Oct 11, 2018, 16:00 IST

Highlights

Anyone buying a two-wheeler must purchase a five-year, third-party cover, and an annual personal accident cover

This is in addition to a comprehensive cover that is sold at the time of purchase of the vehicle

(Representative image)

MUMBAI: Two-wheeler buyers have to pay nearly 10% of the vehicle's price upfront towards insurance premium, while car-buyers are seeing the cost of motor cover double from last month. The premiums have jumped up significantly thanks to two court orders: The first makes purchase of a long-term, third-party insurance cover mandatory, while the second forces vehicle owners to buy a Rs 15 lakh personal accident cover, which is priced exorbitantly by insurers.

Anyone buying a two-wheeler must purchase a five-year, third-party cover, and an annual personal accident cover. This is in addition to a comprehensive cover that is sold at the time of purchase of the vehicle. As a result, for a 150cc bike costing Rs 75,000, the insurance premium would be Rs 7,600. In the case of cars, the owner must pay premium for three years of third-party insurance and an additional Rs 750 towards a personal accident cover.

'Some terms of insurance are not properly worded'

For cars, a three-year, third party insurance and additional personal accident cover is in addition to the comprehensive cover sold by the dealer. For the buyer of a car with engine capacity of over 1,000 cc, the payout towards insurance has doubled to nearly Rs 20,000 from Rs 10,000 earlier.

Last week, IRDAI clarified that the personal accident cover can be paid in instalments. However, insurance industry sources say that the rates are very high. Under the Pradhan Mantri Suraksha Bima Yojana, many non-life companies provide a personal accident cover of Rs 2 lakh for a premium of Rs 12. As against this, the prescribed Rs 750 premium for a Rs 15-lakh personal accident cover works out to Rs 50 per lakh.

According to Segar Sampath Kumar, former general manager at New India Assurance, there is also a need to change the terms of the cover. The policy as it stands says that compensation will be paid for bodily injury or death sustained by the owner-driver of the vehicle in direct connection with the vehicle insured or while mounting into/dismounting from or travelling in the insured vehicle as a codriver.

"The phrase 'in direct connection with the vehicle' is not properly worded. Whether the owner would get covered if he rides pillion on his two-wheeler or as a passenger in his car is not clear," he said. Also, the term co-driver is neither defined in the policy nor in the Motor Vehicles Act.

All Comments ()+^ Back to Top

Characters Remaining: 3000

Continue without login

or

Login from existing account

FacebookGoogleEmail

Share on FacebookShare on Twitter

Refrain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks, name calling or inciting hatred against any community. Help us delete comments that do not follow these guidelines by marking them offensive. Let's work together to keep the conversation civil.